Health Net is leaving California group coverage. What now?

Did a letter from Health Net land on your desk this week?

If you have a Health Net group plan in California or Oregon, it is ending. Notices went out September 1, and coverage is expected to run through February 28, 2027.

Why it matters: this is not a renewal you can negotiate. There is no version where you stay. Health Net is exiting the commercial group business in both states to concentrate on government programs, and the roughly 180 days of notice is what regulation requires, not a courtesy window.

What is actually affected:

• Small group and large group medical, HMO, PPO and POS alike. Groups enrolled through CalChoice are included.
• Dental, vision, standalone dental and vision, and Employer Group Waiver Plans. Life insurance policies are not affected.
• Not affected: Medi-Cal, Medicare, and individual coverage through Covered California under the Ambetter brand. Health Net is not leaving the state.
• Your own notice governs the date. February 28, 2027 is the expected end, but Health Net's broker FAQ says policies end then "or as otherwise permitted by the applicable contract and regulatory requirements." Read your letter rather than the press coverage.
• The last new business effective date was September 1, 2026. The last renewal effective date is February 1, 2027.

Here is what most affected employers will get wrong. Being forced to move is the cheapest opportunity you will get this decade to fix what you are paying, and most groups will spend it buying the closest lookalike of the plan they already had.

You are running a full market process either way. The added cost of modeling level-funded, a captive, or a CHOICE Arrangement (formerly ICHRA) alongside the fully insured quotes is close to nothing. Level-funded typically recovers 8 to 15% of the margin your carrier keeps and hands back your claims data, so next year's renewal is a conversation you can have with evidence instead of a number you are asked to accept.

Two practical cautions. Deductible and out-of-pocket accumulators do not transfer automatically between carriers, so a mid-year move can hand your people a second deductible in one calendar year; ask every finalist about accumulator credit in writing. And network continuity matters most for the handful of employees mid-treatment. Identify them before you shortlist, not after.

Do not wait for February. Every affected group in two states is going to hit this market at once. The employers who move early get underwriting attention, real plan design choices, and enough runway to communicate it properly to their people.

If you have to change carriers anyway, what would make it worth having been forced?

Sources: https://www.beckerspayer.com/payer/centenes-health-net-to-exit-commercial-group-market-in-california-oregon/ https://www.wordandbrown.com/NewsPost/Health-Net-Group-Market-Exit https://www.skylinebenefit.com/health-net-california-group-health-plans-ending-2027/